Key to saving money

The Key to Saving and Becoming a Happier Person

Posted on 13th January 2014

Do you lie awake at night worrying about finances? I know how you feel.

It wasn’t that long ago when I was checking my bank account each hour on payday to see if the money had arrived so I could go out and buy some lunch. Money issues are not nice, and it’s easy to see why having it makes you happy.

They say that money can’t buy you happiness.  But is it just me, or do only rich people say that?

Saving money can make you happy

Recent research suggests that it’s the actual saving of money that makes people happy. More than 1,000 people aged 25 and older were surveyed and 85% said that saving money makes them feel good.

More than half of the surveyed respondents said they have a savings plan, which they say helps them:

  • Face the unknown (92%)
  • Feel proud (89%)
  • Feel independent (84%)
  • Realize life goals (78%)

But it’s more than being independent or realizing life goals, the same research found that the more money you save, the happier you become.

Saving make happy

This chart says two things to me:

  1. £20,000 in savings. How is that possible???
  2. If I had £100,000 in savings, I would be happy too.

It sounds impossible. I know. I’ve lived off £1 for an entire weekend with no food in the cupboards. I’ve taken loans and I’ve been in debt. It was stressful, worrying and lonely. I couldn’t even afford to take the bus into town.

Five easy tips to get started

Over the last few years, I’ve been able to pay off my debts, restore my credit rating and start saving. And I wanted to share five easy tips to help you start saving today. These tips are based on my own finances and lessons learned over the last three years. I hope you find them helpful.

1. Create a budget

Since as long as I can remember, I’ve been keeping a budget on how much money comes in each month and how much I can expect to go out. The budget includes rent, utilities, phone bill, Internet and life insurance in one column, which are my outgoings and a second column displays my income. I subtract my outgoings from my income immediately and this is number that I use to live the upcoming month on (seen below, ‘Net’) – To buy groceries, clothing, etc.

It’s a really simple spreadsheet. Here’s an example of how it looks (mock-up data):

Create a budget


If you use gmail, you can download a free template here

Just remember to save it to your computer otherwise anyone can see your income/ spend.

2. Use cash as much as possible

If I had to look at what made the biggest impact on my savings it would have to be switching from paying with my card all the time to instead using cash. I used to use my card to purchase anything – Groceries, a haircut, and even chewing gum. I never used cash. What changed?

I wanted to save money as I was looking to rent a new apartment. I decided that in order to save, I needed to live on £200 per week. It was difficult to do this when I use my card all the time as I never really see the benefits of saving. I decided to switch to cash and each week, I took out £200. I never took my card anywhere with me. The difference was staggering – I no longer made spontaneous purchases as I only had enough cash to last me the week.

This was in 2010. I’ve now been able to cut back from £200 to £160 per week and it’s been a lot easier to save.

3. Have a list and stick to it

I’m addicted to writing lists. I have a spreadsheet for budgets, a to-do list for work and of course, a shopping list for grocery shopping. When I grew up, my mother went shopping once a week and bought food for the entire week. I miss those times. I now live in a city and have the habit of going to the supermarket each day after work

When you shop for food each day, it’s easy to stray away and buy things you don’t need. Today, everyone carries a phone so it’s easy to keep the list on your phone (like me).

Have a list and stick to it

Each evening, I make a list of what I need to buy for the next day and do not add to it. Once I’ve added the items from my list, I delete them. It’s that simple, and I’m in and out of the supermarket as quickly as possible, grab the things from my list and pay.

In comparison, my girlfriend shops every other day when she needs to grab 1 or 2 things not on my list. She ends up coming home with chocolate and all kinds of things and spends twice as much as I do. She doesn’t write a list.

4. Trim the fat

By trimming the fat, I don’t mean going on a diet or that you need to eat cheap no-brand noodles for the rest of your life but, by slightly changing your lifestyle, you can quickly start to see you savings increase. For example, if you spend £10 per day at lunch during work, did you know that at the end of the year, that’s more than £2,400? That’s a family holiday and a nice amount of money saved right there!

Take a look at your daily spend and see you can adjust it slightly and then use that money to save.

5. Set a savings goal

Each year, I set a goal of how much I want to save. Having goals are important – Exercise daily, eat healthy food, etc. and it’s no different when it comes to finances. When you set a goal to save money, you are more likely to commit to it.

And each year, I try to save more than the previous year. As you get older, times goes very quickly and it’s not long before you start to see your savings start adding up.  Remember that £10 per day you spend on lunch? That’s £7,000 over the course of three years.

Saving money does not mean you can’t treat yourself either. If you set a target and reach it earlier than you planned, it’s Ok to self-indulge. For example, this year I reached my savings goal and the following month when I got paid, I treated myself to a new watch. I deserved it.

Final thoughts

Getting into the routine of budgeting, taking out cash and creating shopping lists is hard – it’s just like joining a gym, the hardest part is getting started and when you see the results, you won’t want stop.

With the New Year just beginning, now is the time to make small changes to your lifestyle and before the end of the year, you too can start saving and become a happier person.

Do you have any personal saving tips you want to share? Feel free to share this post or comment below.

Author: narek.vardanyan

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nick baumer

13th January 2014 at 2:05 pm

Thanks Peachy for these tips!

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